Paris: Reindustrialization is entering a more mature and strategic phase across Europe and the United States, as organizations increasingly prioritize resilience, control, and long-term competitiveness over aggressive expansion.
According to the 2026 edition of the Capgemini Research Institute report, ‘The resurgence of manufacturing: Reindustrialization strategies in Europe and the US, 2026’, nearly 73% of large organizations now have a Reindustrialization strategy in place or under development—up from 59% in 2024—highlighting a decisive shift toward control-first operating models.
The report reveals that while Reindustrialization continues to gain momentum, planned investments are becoming more selective. Total projected investments are expected to decline significantly from $4.7 trillion in 2025 to nearly $2.5 trillion in 2026 over the next three years.
This shift reflects a move toward capital-efficient models rather than reduced ambition, as organizations recalibrate manufacturing and supply-chain footprints to mitigate dependency risks while maintaining competitiveness.
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Strategic Shift Driven by Resilience and Control
The evolving Reindustrialization landscape underscores a broader transformation in global industrial strategy. Organizations are increasingly adopting hybrid models that combine domestic manufacturing, nearshoring, and friendshoring to diversify supply chains. These approaches are designed to limit critical dependency risks while ensuring continued access to key markets.
The impact of Reindustrialization is especially pronounced in manufacturing-intensive and strategically critical sectors such as automotive, electronics, semiconductors, and aerospace and defense.
These industries are leading the transition toward more targeted, technology-enabled industrial frameworks, driven by heightened concerns around supply-chain exposure and geopolitical risks.
“Amid heightened geopolitical and economic uncertainty, Reindustrialization is entering a more mature phase—one that is clearly focused on resilience, sovereignty, and long-term competitiveness,” said Michael Schulte, CEO of Capgemini Engineering and Member of the Group Executive Board.
“Today, the more established Reindustrialization strategies are about building regionally balanced, technology-enabled ecosystems that reduce critical dependency risks, coupled with a pragmatic approach to investment which is driving more flexible, capital-efficient models. With intent now clear, success will depend on delivery—anchoring decisions in long-term value and building the digital and workforce foundations for durable industrial strength.”
Regional Strategies Reflect Diverging Approaches
As Reindustrialization strategies mature, organizations are adopting region-specific approaches rather than converging on a single global model. In continental Europe, friendshoring has gained prominence, with 64% of organizations prioritizing partnerships with allied countries to manage strategic dependencies.
In contrast, the United States is witnessing a surge in reshoring activities, with nearly 48% of organizations reporting investments—up from 30% in 2025. Additionally, 42% continue to invest in nearshoring. Within Europe, nearshoring activity has declined from 55% to 39%, while reshoring has increased modestly from 34% to 42%, reflecting cost pressures and regulatory complexities.
The report highlights that Reindustrialization is also driving a broader realignment of global supply chains. As US and EU organizations rebalance away from China, they are expanding operations in India, followed by Vietnam, Mexico, and Canada.
At the same time, the US is attracting significant foreign investment, with nearly 85% of EU-based organizations investing in US manufacturing to secure market access and navigate trade policies.
However, the shift is not absolute. Around 64% of organizations plan to maintain or increase investments in China over the next three years, indicating a pragmatic and balanced approach to global supply-chain restructuring under Reindustrialization strategies.
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Focus on Long-Term Value Over Scale
A key trend in Reindustrialization is the move away from large-scale, capital-intensive expansion toward flexible and efficient operational models.
Organizations in non-critical sectors are increasingly leveraging alternatives such as contract manufacturing partnerships, shared infrastructure, and multi-product manufacturing assets to reduce capital intensity while retaining strategic control.
The report emphasizes that Reindustrialization decisions are now evaluated through a broader economic lens. A majority of organizations believe supply-chain resilience justifies these investments, with strong expectations of revenue growth over the next three years.
Nearly eight in ten organizations anticipate that economies of scale will eventually reduce unit costs, reinforcing the shift toward long-term strategic value rather than short-term cost savings.
AI Emerges as a Key Enabler of Reindustrialization
Technology is playing a pivotal role in enabling the next phase of Reindustrialization, with 87% of organizations planning investments in advanced manufacturing technologies such as artificial intelligence (AI), automation, and digital twins.
These technologies are helping offset higher production costs associated with localized manufacturing.
AI, including generative and agentic capabilities, is increasingly being deployed in critical areas such as production planning, supply-chain risk modeling, and location selection.
These applications are enabling faster and more informed decision-making, thereby strengthening Reindustrialization execution.
Despite these advancements, talent shortages remain a significant challenge. Many organizations report gaps in skills related to advanced manufacturing engineering, automation, AI, and digital technologies, highlighting the need to align workforce transformation with technological adoption to fully realize the benefits of Reindustrialization.
Methodology
The findings are based on a survey conducted by the Capgemini Research Institute between January 2 and February 3, 2026. The survey covered 1,208 executives from organizations with annual revenues exceeding $1 billion (or $500 million in the defense sector) across the US, UK, and continental Europe, including France, Germany, Italy, the Netherlands, the Nordics, and Spain.
The insights are further supported by interviews with global supply-chain and manufacturing leaders, along with secondary research validated up to March 26, 2026.
